Quiz 5

Q:  Find MC if f(L,K)=L²K^1/2, w=2, v=5 and labor is fixed at 5.

A:  We know that MC=dTC/dq and TC=wL+vK.  Given that L=56, q=(5)²K^1/2 or q/25=K^1/2 which means K=q²/625  Thus TC=2*5+5*q²/625=10+q²/125.  Hence MC=2q/125.